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The World Bank Group helps governments design public-private partnerships (PPPs) and create a balanced regulatory environment to ensure a more efficient and sustainable provision of public services and infrastructure.

Overview

Building modern, sustainable, and reliable infrastructure is critical for meeting the rising aspirations of billions of people around the globe. Infrastructure investment helps raise economic growth rates, offers new economic opportunities, and facilitates investment in human capital. A significant increase in infrastructure investments in emerging market and developing economies is needed to sustainably achieve poverty reduction and shared prosperity, reach the Sustainable Development Goals, and tackle climate change. This is at the heart of the World Bank Group’s Maximizing Finance for Development approach.

The current numbers are stark: about 1.06 billion people live without electricity; 4.5 billion still lack access to safely managed sanitation; and 2.1 billion lack access to safely managed drinking water. More than 300,000 children under five years of age died from washing-related diarrheal diseases in 2016—that’s more than one child every two minutes. Congested and inadequate ports, airports, and roadways are a drag on growth and trade.

Public-private partnerships (PPPs) can be a tool to meet these needs for infrastructure services. When designed well and implemented in a balanced regulatory environment, PPPs can bring greater efficiency and sustainability to the provision of public services such as water, sanitation, energy, transport, telecommunications, healthcare, and education. PPPs can also allow for better allocation of risk between public and private entities.

Yet, much work is needed to make projects "investor ready" and to develop innovative frameworks to leverage private investment. According to the Bank Group’s Private Participation in Infrastructure Database, total investment in infrastructure in 2016 fell to US$71 billion, compared to US$121 billion on average during 2011-2015.

The World Bank Group is committed to helping governments make informed decisions about improving access and quality of infrastructure services, including—where appropriate—using PPPs as one delivery option. This approach is further enabled by working on strengthening data, building capacity, developing and testing tools, promoting disclosure, and encouraging engagement with all relevant stakeholders. Learn more here.

lastupdated: Apr 05, 2018

Over the past decade, the World Bank Group has expanded its support through PPPs because of their ability to improve the quality and delivery of basic infrastructure services. The institution’s unique value proposition for its client countries rests with its capacity to provide support along the entire PPP cycle, from policy advice to transaction closure.

The Bank Group is committed to helping governments make informed decisions about improving access and quality of infrastructure services, including, where appropriate, using PPPs as one delivery option. This approach is further enabled by working on strengthening data, building capacity, developing and testing tools, promoting disclosure and encouraging engagement with all relevant stakeholders.

By providing a wide range of expertise, instruments and services, the Bank Group can contribute to the PPP agenda — from upstream policy advice for regulatory and institutional reforms to downstream transaction support, including a multibillion-dollar lending, investment and guarantee portfolio along with analytical and advisory activities and the ability to convene partners.

Looking ahead, the Bank Group intends to increase its PPP support. (See the latest strategy, A Stronger, Connected, Solutions World Bank Group.) The strategy also creates the framework for many important components of an even more effective PPP agenda, including a strong emphasis on knowledge products and collaboration across the World Bank Group and among development partners, including the Multilateral Development Banks (MDBs) — a precondition to working effectively along the PPP delivery chain.

The Multilateral Development Banks (MDBs) are already actively collaborating, both in terms of direct financing of projects, mobilizing private capital, and improving capacities and knowledge around infrastructure to reduce transaction costs and strengthen the pipeline of bankable projects.

A task force has been set up to harmonize definitions and targets around MDB mobilization. The portfolios of IFC and MIGA are growing. New platforms have been established such as the Global Infrastructure Facility (GIF), which aims to support client demand to prepare and structure complex infrastructure projects so they are able to attract commercial and institutional investment. The GIF focuses on energy, water and sanitation, transport and telecommunications projects that are either climate-smart or trade-enabling.

The World Bank Group has supported countries by helping to create an enabling environment for PPPs, while also structuring advice and finance.

Over the past 15 years, World Bank Group support to PPPs has nearly tripled. Lending, investments and guarantees have increased both in absolute terms and in relative terms, rising from $900 million in 2002 to $2.8 billion in 2016.

The World Bank approved 407 loans with a PPP component between 2002 and 2016 totaling $15.6 billion. The Bank has also made significant contributions to upstream development for PPPs.

Since its inception in 1999, the Public-Private Infrastructure Advisory Facility (PPIAF)has supported 169 knowledge activities and 1,164 technical assistance activities in 139 countries, with total approval expenditures amounting to $290 million. PPIAF’s support has contributed to leveraging $18.3 billion in investment financing for infrastructure PPPs globally.

The Multilateral Investment Guarantee Agency (MIGA) supported 81 PPP projects through political risk insurance, with a total $5.1 billion gross exposure between 2002- 2012. In FY16, MIGA approved four PPP projects with a total gross exposure of $817 million.